Tesla, Inc. has two divisions, Model S and Model X. Following is the income statement for the previous year:

Model S Model X

Sales $898,200 $598,800

Variable Costs 599,080 538,920

Contribution Margin $299,120 $59,880

Fixed Costs 160,050 160,050

Profit Margin $139,070 $(100,170)

Of the total fixed costs, $250,000 arecommon fixed coststhat are allocated equally between the divisions. What would Tesla's profit margin be if Model X were dropped?

Multiple Choice

• $898,200
• $14,070
• $299,120
• $139,070